Working The Good Life

SAS Provides Employees With Generous Work Incentives

If there is a heaven on earth on the job, it is at SAS Institute -- a design for living and working the good life. Morley Safer reports.

It all began 26 years ago, when SAS started distributing free M&M's every Wednesday. Those M&M's grew into a collection of perks so vast that even longtime employees like Mark Britt are slightly astonished.

"Obviously, when you've talked to people who've worked in other places, it's really hard for us to complain. And we catch ourselves sometimes complaining. Then we go, 'I can't believe I said that,' says Britt, laughing.

To atone for the M&M's, SAS provides a 50,000 square foot state-of-the art fitness center, where the software programmers and assorted techies can burn fat, pump iron, and shoot pool -- even during working hours.

It's all free, and all designed to keep the SAS workforce happy. Britt, a software developer, has been at the company since 1989.

"I just can't imagine leaving SAS, and I've felt that way for a very long time," says Britt. "If somebody offered to double my salary, I wouldn't even think about it."

Like his colleagues, Mark works a flexible schedule. The company encourages people to get their work done in a 35-hour week. Mark adheres strictly to the SAS dress code, which is no code. Laid back is the unofficial posture here, and convenience the motto – along with other perks such as onsite car detailing, a putting green, and, of course, the masseur.

The author of all this pampering is Jim Goodnight, a lanky, laconic billionaire, the co-founder and CEO of SAS.

"What's wrong with treating your people good?" asks Goodnight. "All I can say is it's worked for us."

Indeed it has. SAS has never had a losing year and never laid off a single employee. Last year they sold $1 billion worth of their analytical software to America's biggest corporations. This software is sophisticated stuff that helps everyone from Victoria's Secret to the U.S. military work more efficiently, by turning raw data into useful information.

The armies of programmers who churn out the product are paid a competitive wage, but are not offered stock options, because there is no stock. Still, by offering extraordinary perks, SAS keeps turnover low, and a happy, experienced workforce -- 9,000 strong -- keeps customers coming back year after year.

"If the employees are happy, they make the customers happy," says Goodnight, addresses employees. "If they make the customers happy, they make me happy."

This simple approach has made Goodnight the wealthiest man in North Carolina. As the founder of a privately held company, he answers to no one -- no shareholders, no board of directors, no clutch of Wall Street analysts.

That hasn't stopped investment bankers from coming to call, wanting him to take his company public. So far, Goodnight has told them, "Good night."

"There is no trust anymore in public companies," says Goodnight. "I think it's an excellent time to be private."

"You have to have the commitment of the CEO to stick with it. You can't just have a weak quarter and then all of a sudden start bailing out and cutting things. I am basically my own board. So, I don't have to worry about pressure from the board or being fired if I don't improve earnings."

Goodnight says it's pressure from Wall Street to please shareholders by delivering rising quarterly earnings that has poisoned the corporate well.

"There's no possible way I can tell you what my earnings are going to be to the penny each quarter," he says. "There's only one way to get there to the penny -- you have to cook the books."

And walk the walk. The millionaire perpetrator walks can be found all over the evening news. Two WorldCom executives were arrested and charged with securities fraud and conspiracy. Meanwhile, the company laid off 26,000 workers.

There's top brass, like Kenneth Lay of Enron, who's now tarnished brass.

And there's Dennis Kozlowski of Tyco, John Rigas of Adelphia --- both indicted, both accused of outright theft.

"Given the stuff that's going on right now in corporate America, I don't want to be labeled as a public CEO," says Goodnight to his employees. "I want people to know I don't have to cheat and lie and all that stuff."

His style of management flies in the face of a culture of corporate greed. While benefits are shrinking at most corporations, Goodnight offers the kind of perks that working parents dream of. There are SAS Montessori daycare programs that accommodate 850 SAS kids. And the cost is about a third of what it would be in the real world. And in the real world, daycare is not right next door.

And a short walk away is a company cafeteria unlike any other. There's a little Gershwin to help with digestion, and calm the kids. Somehow, the words to the song "Someone To Watch Over Me" seems a little redundant.

"Having the children here, it helps ease the stress of juggling everything," says employee Beverly Dudley. She, along with her husband and daughters, are looked after by the SAS medical staff – including doctors, nurses, and physical therapists -- absolutely free. When a specialist is required, SAS picks up 80 percent of the tab.

But are these perks as altruistic as they appear to be?

"No, we're not altruistic by any stretch of the imagination. This is a for-profit business and we do all these things because it makes good business sense," says Jeff Chambers, director of human resources at SAS.

Saving from perks like the on-site health care also far exceed the costs.

"The average office visit in our area is probably two hours, door-to-door. We've got data that says we can see somebody and get them back to work in 30 minutes," adds Chambers. "So we're saving an hour and a half of staff time."

That's not the only savings. The SAS culture keeps employees content, and keeps them from leaving. On average, software companies turn over more than 20 percent of their employees each year.

At SAS, it's around 3 percent, and according to Stanford University business professor Jeffrey Pfeffer, that 17 percent difference saves SAS millions in recruiting and training costs.

"You're talking $60, $70, $80 million a year conservatively," says Pfeffer.

Goodnight's unconventional approach has so impressed Pfeffer that he teaches the SAS model at his executive seminar at Stanford.

"Why is this so hard to copy? Twenty-six years of double-digit growth, three percent employee turnover, even in the height of the dot-com craze," says Pfeffer. "In order to be exceptional and earn extraordinary returns you have to dare to be different."

Pfeffer believes that many companies -- including publicly held companies -- could benefit from Goodnight's example -- if only they could convince shareholders to think in the long term.

"It's completely common sense to understand the trade off between time and money," says Pfeffer. "If you take burdens off your employees so that they do not have to spend time sitting in doctor's offices, and all this other stuff, then they will be more productive."

To ease those nagging burdens, SAS arranges with local merchants to deliver goods and services to the office. They even have a department called "work-life." The women at the table are all social workers, and their job is to relieve their fellow employees of life's problems -- from finding the right college for their kids to finding the right nursing home for their parents.

Goodnight welcomes anything that increases productivity or inspires the imagination -- like the more than 3,000 works of art displayed throughout the campus.

"Creativity is extremely important, and anything I can do to, you know, get those creative juices flowing among the people here, I want to do that," says Goodnight, who has two full-time artists-in-residence on staff paid to paint.

Everything about the company setting seems built on the idea that by feeding the spirit, people are more than willing to serve the company.

SAS may look like a country club, but of course it's not. But there is a country club. It's owned by Goodnight and it costs $30,000 to join. But if you work for SAS, you get a 90 percent discount – making it just about $3,000 for membership.

The three golf courses and tennis courts and swimming pools, only a 10-minute drive from work, are just another way Goodnight tightens the velvet handcuffs. The neighborhood surrounding the country club is chock full of SAS workers like Britt, who often takes his twins swimming after picking them up at SAS daycare.

Could it be just too much SAS?

"I've been here 13 years and it's not too much yet. I think it's a good thing," says Britt. "Sometimes it does sort of feel like Disney World, but, everybody likes Disney World, you know? That's good."

But is there any concern about those working from SAS developing an excessive kind of company store or cult mentality? For instance, you can go the company doctor, you can go to the company school, and you can go to the company daycare. No, says Chambers.

"You can use all the perks, the many we have available," says Chambers. "You can use none of them. The culture's very accepting that if you want to just show up, do your job and collect a paycheck, that's fine. But it's all here for you, if you want to use it."

SAS thrives by shunning conventional wisdom. While many companies treat employees as annoying necessities, Goodnight regards his as the best investment he ever made.

"You know, I guess 95 percent of my assets drive out the front gate every evening," says Goodnight. "It's my job to bring them back."
  • Rebecca Leung

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